Whereas a large body of the literature on unemployment accounts (UAs) explores how they could improve labor market and saving incentives, this paper examines how their implementation affects the form and extent of private insurance markets' incompleteness. The analysis is conducted from an alternative perspective. Instead of assuming that markets are nonexistent for exogenous reasons, the source of incomplete risk sharing is modeled endogenously, relying on the assumption of the limited enforceability of private contracts. If the only enforcement mechanism is the threat of exclusion from future insurance markets upon default on existing contracts, the introduction of UAs implies stricter no-default conditions, restricts the set of individually rational contracts, and then limits the private risk sharing.

Platoni, S., Unemployment Accounts and Private Insurance Markets, <<FINANZARCHIV>>, 2017; 73 (1): 42-76. [doi:10.1628/001522116X1474450192144] [http://hdl.handle.net/10807/97288]

Unemployment Accounts and Private Insurance Markets

Platoni, Silvia
2017

Abstract

Whereas a large body of the literature on unemployment accounts (UAs) explores how they could improve labor market and saving incentives, this paper examines how their implementation affects the form and extent of private insurance markets' incompleteness. The analysis is conducted from an alternative perspective. Instead of assuming that markets are nonexistent for exogenous reasons, the source of incomplete risk sharing is modeled endogenously, relying on the assumption of the limited enforceability of private contracts. If the only enforcement mechanism is the threat of exclusion from future insurance markets upon default on existing contracts, the introduction of UAs implies stricter no-default conditions, restricts the set of individually rational contracts, and then limits the private risk sharing.
eng
http://www.ingentaconnect.com/contentone/mohr/fa/2017/00000073/00000001/art00002
Platoni, S., Unemployment Accounts and Private Insurance Markets, <>, 2017; 73 (1): 42-76. [doi:10.1628/001522116X1474450192144] [http://hdl.handle.net/10807/97288]
File in questo prodotto:
File Dimensione Formato  
Platoni2017-FA.pdf

non disponibili

Tipologia file ?: Versione Editoriale (PDF)
Licenza: Non specificato
Dimensione 725.5 kB
Formato Unknown
725.5 kB Unknown   Visualizza/Apri   Contatta l'autore

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/10807/97288
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus 0
  • ???jsp.display-item.citation.isi??? 0
social impact